 TIOL-DDT 1991
27.11.2012
Tuesday CUSTOMS, Central Excise and Service Tax assessees all over the country are in for real trouble in the next four months as the Board appears to have directed its Chief Commissioners to address the Revenue targets by a four pronged attack by using four As. 1. A is for Audit: In the next four months menacing Audit parties from the Department will descend on your premises and make you feel very uncomfortable and accuse you of evading taxes and persuade you to make spot payments of duty. Once you do that, another set of officers will come and demand interest and yet another group will issue a Show Cause Notice charging you with all possible violations and demand duty, interest and penalty. 2. A is for Anti Evasion: There is another group of officers who will make you feel that the Audit Group officers were angels. They will seize your goods, threaten you with arrest, summon you, take away your records and then force you to admit evasion, pay the duty and beg for mercy. 3. A is for Adjudication: Adjudication is a necessary corollary of Audit and Anti Evasion exercises. During the next four months, there will be an adjudication spree confirming all demands with interest and equal penalty and overanxious officers will swarm your place with coercive action to recover the arrears. 4. A is for Arrears Recovery: Every unreasonable, unfair and unjust order will leave a trail of arrears, which are to be immediately collected to boost revenue. Arrears recovery cells will be activated and there will be attachments, deterrent actions and all kinds of recovery measures. Beware of these four As - they are going to attack you in the next four months. You need God's help for doing business in India. It is said that the sine qua non of contract is quid pro quo, but in taxation, there is no equity. The ultimate beneficiary of the Actions by the Authorities in four As would be the fifth A - A is for Advocate. Service Tax on Renting of Immovable Property - Interest from when? DDT 1985 had advised taxpayers to pay the tax on ‘renting of immovable property' with interest by 27th November 2012 to avoid penalty. Later the Board placed an ad in our own site advising assesses to pay the tax by 28th November 2012. That is tomorrow. But tomorrow is a public holiday and so the payment can be made on 29th November. But another question arises - From when is interest payable? Please read an interesting article in our ST se GST tak Functioning of Review Committee of Commissioners - CBEC Instructions ADJUDICATION Orders of Commissioners are reviewed by a Committee of two Chief Commissioners and those of Commissioners(A) are reviewed by a Committee of Commissioners. Appeals are filed before the CESTAT based on the review and authorisation by these committees. Board has found that the appeals against the orders of these Commissioners are dismissed on technical grounds. Scrutiny of several judicial pronouncements on the subject reveals that there are three broad categories of defects noted in such orders, which led to the dismissal of Departmental appeals. Defects in issuance of review cum authorization are seen to be a recurrent feature in most of the orders passed by the High Courts and the Tribunal. In some cases, appeals have been dismissed on account of absence of review- cum- authorization given by the Committee for filing appeal. This is an incurable legal infirmity and the law does not provide for curing this defect. Several orders have been dismissed by the Tribunal as well as the High Courts on the grounds such as signing of authorization by one Commissioner instead of both the Commissioners constituting the committee, undated authorization, date appearing below the signature not indicating the year etc. These technical defects have led to the conclusion being drawn by the Tribunal that authorization was not proper and valid. Another recurrent omission, noted in several orders, is lack of application of mind by the members of the committee showing any meaningful consideration of the issue being examined. This was the reason for dismissal of appeal by the High Court of Delhi in the case of Kundalia Industries reported in 2011-TIOL-930-HC-DEL-CX. The third main reason for several dismissals of the appeals filed by the Department is that no meeting was held by the committee to show meeting of mind or ad idem . This has been the stated reason in several recent decisions of Delhi Bench of the Tribunal. Taking note of the judgments in the case of Kundalia Industries cited above, Grand Prints Ltd reported in 2009-TIOL-1109-CESTAT-DEL and several such judgments of the Tribunal and the High Courts, the CBEC wants the following precautions to be taken by the Commissioners constituting the committee while dealing with the review files- (i) The notings in the file and other relevant records should show meaningful consideration and application of mind by the committee. (ii) It should be ensured by the members of the committee that review cum authorization orders are passed in each case. (iii) Procedural infirmities in the review cum authorization viz. signature of one Commissioner, signature without date, name not mentioned below signature etc. should be avoided. (iv) The Members of the Committee may make use of Video Conferencing for conducting meeting wherever feasible.
The above omissions are only indicative and not exhaustive. These have been observed in various judgments by the Tribunal and High Courts on more than one occasion. The above precautions may be adopted by the committee of Chief Commissioners also. Board also urges that due seriousness and diligence should be attached to the quasi-judicial function of review and the same should not be an idle formality. Board has to tell its senior-most officers like Commissioners and Chief Commissioners to be a little more serious in their work! CBEC F.No.390/Review/2/2012-JC., Dated: November 23, 2012 Review by Committees - What Really Happens THE Committees of two Commissioners and two Chief Commissioners were stipulated to ensure that review is more meaningful and frivolous appeals are avoided, but the bright officers in the field are capable of frustrating any good intention of the Board. This is how the review really takes place step by every farcical step. Let us take the case of an order passed by a Commissioner (A). 1. Commissioner (A) passes an order on 1.1.2012. 2. The jurisdictional Commissioner who sits in the same building gets a copy of the order on 1.4.2012 (This is how time is gained to file appeal before Tribunal) 3. There is a Superintendent (Review) in the Commissioner's office who actually reviews the order of the Commissioner (A). He reviews the order, decides that it is not proper and legal and writes a Draft Review Order and Authorisation Order to file an appeal in the Tribunal. 4. His Commissioner signs the Review Order and authorisation. 5. Then the file is taken to the other Commissioner in the Committee of Commissioners who simply signs on the Review Order and authorisation. 6. In this process, some Commissioners forget to sign, some others don't put the dates etc,. 7. The whole Committee system is successfully thwarted!
Permanent Additional Charge - CBEC Instructions ONE of the major functions of the Board is to find a Chief Commissioner to act as additional charge Chief Commissioner, when a Chief Commissioner goes on leave or is absent. In order to draw a well defined system having pre-approved chain of nomination, so as to ensure that in the event of an officer at the level of Chief Commissioner / Directors General and Commissioners in the CBEC proceeding on leave/absence, CBEC has approved a chain of nomination (Link Officer): For example, if the Delhi Central Excise Chief Commissioner goes on leave, the post will be held by the Delhi Customs Chief Commissioner as the first link officer and if he is not available, the Chief Commissioner, Jaipur as the second link officer. Similarly if the DGRI goes on leave, the post will be held by DGCEI or DG(vig). Board wants the Chief Commissioners to appoint similar link officers at all levels in their jurisdiction. CBEC F.No.F.No.A-22011/12/2012-Ad.II., Dated: November 23, 2012 Liaison Office (LO)/Branch Office (BO) in India by Foreign Entities - Reporting to Income Tax Authorities LIAISON Offices (LO)/Branch Offices (BO) are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002. RBI clarifies that copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account. Further, at the time of renewal of permission of LOs by AD banks, they may note to endorse a copy of each such renewal to the office of the DGIT (international Taxation). RBI AP (DIR Series) Circular No. 55., Dated: November 26, 2012 Setting up of a Special Cell for SCs /STs in Scheduled Commercial Banks INDIAN Scheduled Commercial Banks were advised to set up a Special Cell for monitoring the flow of credit to SC / ST beneficiaries. The 15th Lok Sabha Committee on Welfare of Scheduled Castes / Scheduled Tribes during its recent visit to one of the Scheduled Commercial Banks, observed that there was no such Cell in that bank. RBI has therefore, reiterated that all Indian Scheduled Commercial Banks should set up a Special Cell for SCs / STs, if they have already not done so and ensure that instructions issued by RBI regarding credit facilities to Scheduled Castes / Scheduled Tribes are implemented properly. RBI RPCD CO BC GSSD NO. 48/09.09.01/2012-13., Dated: November 26, 2012 Jurisprudentiol - Thursday's cases  Central Excise
ROM filed without reading final order - Frivolous application dismissed: CESTAT ROM application filed on the ground that in final order there is no finding in respect of penalty imposed u/r 173Q by the adjudicating authority - it appears that application is filed without reading the final order as in the last paragraph it has been specifically held penalty imposed u/r 173Q is set aside - Frivolous application dismissed. Income Tax Whether in case of composite housing project, Sec 80IB(10) benefits are to be allowed based on principle of proportionality if conditions are partly satisfied by assessee - YES: HC THE assessee is engaged in the business of development and construction of flats. There were four projects to its credit. Of these four projects, in Agrini and Vajra, the assessee had constructed and sold flats measuring less than 1500 sq.ft as well as more than 1500 sq.ft. The assessee claimed deduction u/s 80IB(10) and did not claim deduction in respect of flats exceeding an extent of 1500 sq.ft. The AO viewed that the deduction under the Section being for the project as a whole and all the residential units in the project must satisfy the conditions therein, on the admitted facts as to the units having built-up area more than 1500 sq.ft., the assessee was not eligible for deduction for the entire projects Agrini and Vajra, but was only eligible for deduction in respect of the other two projects. Service Tax Contempt notice for misleading Bench - Application for modification of Miscellaneous order - in view of unconditional apology tendered, SCN issued for initiation of contempt proceedings withdrawn: CESTAT VIDE order dated 28/06/2012, the Tribunal has issued a show-cause notice to the applicant that why not contempt of Court proceedings be initiated against them for misleading the Court by stating wrong facts. The show-cause notice has been replied by the appellant and they have tendered unconditional apology for the inconvenience caused to this Bench, therefore, the show-cause notice issued to the applicant is withdrawn. Tomorrow is a holiday See our columns Thursday for the judgements Until Thursday with more DDT Have a Nice Day Mail your comments to vijaywrite@taxindia online.com |
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